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Market Internals

There are four indicators that make up the core market internals:

1 Breadth Ratio: The ‘Market Breadth’ or ‘Breadth Ratio’ is a volume ratio composed of volume flowing into up stocks versus volume flowing into down stocks.

The breadth ratio is expressed: Up Volume / Down Volume.

2 Advance/Decline Line: The ‘Advance/Decline Line’ or ‘A/D Line’ for short, is the second most important of the internals. This indicator tells us the net sum of advancing stocks minus declining stocks.

The A/D Line is expressed: # of Advancing Stocks – # of Declining Stocks

3 Trin: TRIN stands for TRaders’ INdex and was developed by Richard Arms in 1989 (it’s also referred to as the Arms Index). Its main purpose is for detecting overbought and oversold levels in the markets

The Trin is expressed: # of advancing stocks / # of declining stocks divided by

volume of advancing stocks / volume of declining stocks

4 Tick: The NYSE Tick Index gives us the relationship of stocks up ticking versus down ticking at their last traded price.

Each indicator has a separate reading for the NYSE and NASDAQ.

See also:

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All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
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